Exhibit 10.89


 


FIRST AMENDMENT TO
CREDIT AGREEMENT AND WAIVER


 


THIS
FIRST
AMENDMENT TO CREDIT AGREEMENT AND WAIVER, dated as of the 11th day of December, 2009 (this “Amendment”),
is made by and between BROTMAN MEDICAL CENTER, INC., a California corporation,
as borrower (the “Borrower”) and GEMINO HEALTHCARE FINANCE, LLC, a
Delaware limited liability company, as lender (“Lender”).


 


BACKGROUND
STATEMENT


 


A.            The Borrower and Lender are parties to a Credit
Agreement, dated as of April 14, 2009 (as amended, restated, supplemented
or otherwise modified from time to time, the “Credit Agreement”).  Capitalized terms used herein without
definition shall have the meanings given to them in the Credit Agreement.


 


B.            The Borrower has requested that Lender (i) waive
certain Events of Default, pursuant to Section 6.06  of the Credit Agreement, and (ii) agree
to make certain revisions to the Credit Agreement. Lender has agreed to make
the following amendments to the Credit Agreement and provide the following
waivers and consents, subject to the terms and conditions set forth herein.


 


STATEMENT OF
AGREEMENT


 


The parties hereto, in
consideration of the mutual covenants and agreements set forth herein, agree as
follows:


 


ARTICLE I


 


AMENDMENTS


 


1.1           Amendment to Definition of “Advance
Rate”. The definition of “Advance Rate” in Annex I of the Credit
Agreement is hereby amended by deleting it in its entirety and replacing it
with the following:


 


“Advance Rate” means eighty-five percent
(85%). Or such percentage resulting from an adjustment pursuant to Section 2.01(e) hereof.


 


1.2           Amendment to Definition of “Eligible
Account”. The definition of “Eligible Account” in Annex I of the
Credit Agreement is hereby amended by deleting the word “and” at the end of subsection
(l), adding “and” to the end of subsection (m) and adding a new subsection
(n) as follows:


 


(n)           to
the extent such Account is Medicaid Pending, it is not outstanding more than
thirty (30) days part the date the corresponding services and/or goods were
provided.”


 

















 


1.3           New “Medicaid Pending” Defined
Term.  A new defined term “Medicaid
Pending” shall be added to Annex I of the Credit Agreement as follows:


 


“Medicaid
Pending” means an amount that will be billed to Medicaid for services
rendered to patients that are expected to qualify for the state Medicaid
program, but are in the process of completing the necessary paperwork and have
not yet been officially accepted by the state as eligible Medicaid
participants.”


 


1.4           Amendment to Definition of “EBITDAC”.  The definition of “EBITDAC” in Annex I
of the Credit Agreement is hereby amended by deleting it in its entirety and
replacing it with the following:


 


“EBITDAC”
means the sum of net income plus (i) interest expense, (ii) taxes, (iii) depreciation
and amortization, (iv) consulting fee expense and (v) the amount of
any non-cash deduction to consolidated net income as a result of any grant to
any members of the management or employees of such Person of any Capital Stock
to the extent such deduction is included in the calculation of net income of
such Person for such period.


 


1.5           Amendment to Definition of “Fixed
Charge Coverage Ratio”.  The
definition of “Fixed Charge Coverage Ratio” in Annex I of the
Credit Agreement is hereby amended by deleting it in its entirety and replacing
it with the following:


 


“Fixed
Charge Coverage Ratio” means the ratio of (a) EBITDAC, to (b) the
sum of (i) the current portion of any long-term Indebtedness (provided,
that any indebtedness under the JHA Loan between BMC and JHA West 16 LLC shall
not be considered “current” so long as the Borrower repays or refinances the
JHA Loan between JHA West 16 LLC, prior to April 1, 2011), plus (ii) the
current portion of lease payments under capitalized leases, plus (iii) cash
interest paid, plus (iv) income taxes paid, plus (v) any
unfinanced capital expenditures paid in cash by Borrower, plus (vi) any
Distributions paid in cash, plus (vii) any consulting fees
(including without limitation the Prospect Consulting Fee) paid, plus (viii) current
portion of any amount due to CMS under any extended repayment plan in
connection with any CMS Claim, in accordance with generally accepted accounting
principles consistently applied, on a rolling four quarter basis; provided, however,
that such calculation as of the fiscal quarter ending December 31, 2009
shall be for the most recent fiscal quarterly period ending on such date on a
cumulative, annualized basis; such calculation for the fiscal quarter ending March 31,
2010 shall be for the two (2) most recent fiscal quarterly periods ending
on such date on a cumulative, annualized basis and such calculation for the
fiscal quarter ending June 30, 2010 shall be for the three (3) most
recent fiscal quarterly periods ending on such date on a cumulative, annualized
basis.


 


1.6           Amendment to Section 6.06(b).  The Credit Agreement is hereby amended by deleting
Section 6.06(b) in its entirety and replacing it with the
following:


 


“(b)         Fixed
Charge Coverage Ratio. Borrowers shall maintain a Fixed Charge Coverage
Ratio, measured quarterly at the end of each fiscal quarter, of not less than (i) 1.00:1.00
for the fiscal quarters ending December 31, 2009 and March 31, 2010; (ii) 1.05:1.00
for the fiscal quarters ending June 30, 2010 and September 30, 2010, (iii) 1.10:1.00
for the fiscal quarters ending December 31, 2010 and March 31, 2011,
and (iv) 1.20:1.00 for the fiscal quarter 


 


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ending June 30, 2011 and each fiscal quarter
ending thereafter. The Fixed Charge Coverage Ratio shall be calculated for the
four quarters immediately preceding the quarter being measured, provided, however,
that for the first three quarters of testing following December 31, 2009,
the Fixed Charge Coverage Ratio shall be calculated on a cumulative annualized
basis. The first calculation of the Fixed Charge Coverage Ratio shall be for
the quarter ending December 31, 2009.”


 


ARTICLE II


 


WAIVERS


 


2.1           Financial Covenants.           Lender hereby waives the Events of
Default pursuant to Section 6.06(b) of the Credit Agreement that occurred
upon the testing periods ending June 30, 2009 and September 30, 2009.


 


ARTICLE III


 


REPRESENTATIONS
AND WARRANTIES


 


The Borrower hereby represents and warrants as follows:


 


3.1           Representations
and Warranties. After giving effect to this Amendment, each of the
representations and warranties of the Borrower contained in the Credit
Agreement and in the other Loan Documents is true and correct on and as of the
date hereof with the same effect as if made on and as of the date hereof
(except to the extent any such representation or warranty is expressly stated
to have been made as of a specific date, in which case such representation or
warranty is true and correct as of such date).


 


3.2           No Default. After giving
effect to this Amendment, no Default or Event of Default has occurred and is
continuing.


 


3.3           Enforceability. This Amendment
has been duly executed and delivered by the Borrower and constitutes the Borrower’s
legal, valid and binding obligation, enforceable in accordance with its terms,
except as such enforceability may be limited (x) by general principles of
equity and conflicts of laws or (y) by bankruptcy, reorganization,
insolvency, moratorium or other laws of general application relating to or
affecting the enforcement, of Lender’s rights.


 


3.4           No Conflicts. No consent,
approval, authorization or order of, or filing, registration or qualification
with, any court or governmental authority or third party is required in
connection with the execution, delivery or performance by the Borrower of this
Amendment.


 


3.5           Obligations. The execution and
delivery of this Amendment does not diminish or reduce the Borrower’s
obligations under the Loan Documents, except as modified by this Amendment.


 


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3.6           No Claims. No Borrower has any
claims, counterclaims, offsets or defenses to the Loan Documents and the
performance of its obligations thereunder, or if any Borrower has any such
claims, counterclaims, offsets, or defenses to the Loan Documents or any
transaction related to the Loan Documents, the same are hereby waived,
relinquished and released in consideration of Lender’s execution and delivery
of this Amendment.


 


ARTICLE IV


 


CONDITIONS TO
EFFECTIVENESS


 


The effectiveness of the
amendments to the Credit Agreement and of the waivers and consents set forth in
this Amendment is subject to the satisfaction of the following conditions:


 


4.1           Executed Amendment and Other
Documents. This Amendment and any other documents required by Lender in its
sole discretion shall have been duly executed and delivered by Borrower in form
and substance satisfactory to Lender in its sole discretion.


 


4.2           Fees.  Upon Closing, Borrower shall have paid to
Lender (i) all Expenses (including without limitation the reasonable fees
and expenses of counsel to Lender) associated with this Amendment, and (ii) Five
Thousand Dollars ($5,000) to Lender as a waiver fee.


 


4.3           No Material Adverse Change. No
Material Adverse Effect has occurred and is continuing, and no Borrower knows
of any event, condition or state of facts that could reasonably be expected to
have a Material Adverse Effect.


 


ARTICLE V


 


MISCELLANEOUS


 


5.1           Effect of Amendment. From and
after the Effective Date (as defined below), all references to the Credit
Agreement set forth in any other Loan Document or other agreement or instrument
shall, unless otherwise specifically provided, be references to the Credit
Agreement as amended by this Amendment and as may be further amended, modified,
restated or supplemented from time to time. This Amendment is limited as
specified and shall not constitute or be deemed to constitute an amendment,
modification or waiver of any provision of the Credit Agreement or of any other
Loan Document except as expressly set forth herein. Except as expressly amended
hereby, the Credit Agreement shall remain in full force and effect in
accordance with its terms.


 


5.2           Governing Law. This Amendment
shall be governed by and construed and enforced in accordance with the laws of
the Commonwealth of Pennsylvania (without regard to the conflicts of law
provisions thereof).


 


5.3           Expenses. Borrower agrees to
pay upon demand all out-of-pocket costs and expenses of Lender (including,
without limitation, the reasonable fees and expenses of counsel to Lender) in
connection with the preparation, negotiation, execution and delivery of this
Amendment.


 


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5.4           Severability. To the extent
any provision of this Amendment is prohibited by or invalid under the
applicable law of any jurisdiction, such provision shall be ineffective only to
the extent of such prohibition or invalidity and only in any such jurisdiction,
without prohibiting or invalidating such provision in any other jurisdiction or
the remaining provisions of this Amendment in any jurisdiction.


 


5.5           Successors and Assigns.  This Amendment shall be binding upon, inure
to the benefit of and be enforceable by the respective successors and assigns
of the parties hereto.


 


5.6           Construction. The headings of
the various sections and subsections of this Amendment have been inserted for
convenience only and shall not in any way affect the meaning or construction of
any of the provisions hereof.


 


5.7           Counterparts; Effectiveness.
This Amendment may be executed in any number of counterparts and by different
parties hereto on separate counterparts, each of which when so executed and
delivered shall be an original, but all of which shall together constitute one
and the same instrument. This Amendment shall become effective upon the
execution and delivery of a counterpart hereof by the Borrower and Lender and
the satisfaction of the conditions set forth in Article III hereof (such
date, the “Effective Date”). 
Signatures of the parties to this Amendment transmitted by facsimile or
via other electronic format shall be deemed to be their original signatures for
all purposes.


 


[Signatures
on following page.]


 


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IN WITNESS WHEREOF, this
Amendment has been duly executed as of the day and year first above written.


 


 


	
  BORROWER:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Address for
  notices to Borrower:

  	
   

  	
  BROTMAN MEDICAL
  CENTER, INC.

  
	
   

  	
   

  	
   

  
	
  Brotman Medical
  Center, Inc.

  	
   

  	
   

  
	
  3828 Delmas Terrace

  	
   

  	
   

  
	
  Culver City, CA 90231

  	
   

  	
   

  
	
  Attn: Von Crockett,
  Chief Executive Officer

  	
   

  	
  By:

  	
  /s/ Von Crockett

  
	
  Fax: (310) 202-4125

  	
   

  	
  Name:

  	
  Von Crockett

  
	
   

  	
   

  	
  Title:

  	
  Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  LENDER:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Address for
  notices to Lender:

  	
   

  	
  GEMINO
  HEALTHCARE FINANCE, LLC

  
	
   

  	
   

  	
   

  
	
  Gemino Healthcare Finance, LLC

  	
   

  	
   

  
	
  1 International Plaza,
  Suite 220

  	
   

  	
  By:

  	
  /s/ Miriam P. Gallagher

  
	
  Philadelphia, PA 19113

  	
   

  	
  Name:

  	
  Miriam P. Gallagher

  
	
  Attn: Miriam Gallagher

  	
   

  	
  Title:

  	
  Senior Portfolio
  Manager

  
	
  Fax: (610) 870-5401

  	
   

  	
   

  



 


With a copy to
(which shall not constitute notice):


 


Waller Lansden Dortch & Davis, LLP


511 Union
Street, Suite 2700


Nashville City Center


Nashville, TN 37219


Attn:  Robert L. Harris


Fax:  (615) 244-6804